Urea prices remained constant in practically all regional markets as producers and traders either participated in the current Indian tender or held back on sales in anticipation of the tender's outcome. The US Urea market is no exception, and as a result, it remains gloomy and is currently seeing weak demand sentiments. Additionally, the Urea market's current surplus can result in fierce competition between manufacturers, with lower pricing being the result of the tender.

In this scenario, the downside on Urea prices is quite limited because prices nearing USD 300/MT would put enough producers under pressure as the margins will be squeezed. Consequently, the production rates would be reduced, widening the supply-demand gap. According to ChemAnalyst pricing team, Urea price for the recent week of March is reported at USD 360/MT (FOB Illinois) after witnessing a significant fall in previous weeks due to weakening demand and further reductions in production costs. In addition to a growing import line-up on the trader side, market sentiment against Urea appears to be softening in front of the spring demand.

The feedstock Ammonia, on the other hand, remained plummeting with prices falling throughout the domestic American market. Many significant Ammonia exporters are facing increased pressure to transfer volumes quickly to avoid having to shut down plants due to a lack of storage capacity. However, this month, purchasers of Ammonia spot are likely to find some good deals. Furthermore, a US nitrogen fertilizer expert reported that Ammonia prices are expected to remain weak for the next 12 months. There is ample supply build in both the east and west. ChemAnalyst recorded the Anhydrous Ammonia CFR Tampa prices at USD 613/MT for the recent week after falling by around 12% within a week.

As per ChemAnalyst, the outlook for Urea pricing remains softer, but if purchasers return to the market for spring goods, prices could stabilize as any recovery in the US Urea market is likely to be modest. It is also possible that the price drop might be greater than the market fundamentals indicate, in that case the Indian tender could cause a price rebound.